What is a Combined Motor Trade policy?
A combined traders policy covers more than just the standard road risks. It can cover the following (and more!)
A Combined Motor Trade insurance policy is an insurance product aimed at motor traders who operate from a specific business premises rather from their own home, although it can be taken out by people who operate from home as well.
It’s usually a combination of a Road Risk insurance policy and insurance products/add-ons that cover the premises the motor trader operates from. For a motor trader occupying a business premises, you have many more responsibilities and exposures to a loss than just driving cars on the public road. It would be prudent to consider the following areas of cover where you may suffer financial loss in the event of a claim. An incident, where you are uninsured, could have a devastating impact to your business and ability to trade profitably.
A Combined Motor Trade policy can cover:
The buildings themselves
If you own the buildings, you would be advised to insure them against perils such as flood, malicious damage, fire, accidental damage and even subsidence. If you own the premises on a mortgage, your providers will insist on a minimum level of cover, with a reputable insurer and ask their financial interests are noted in the policy.
If you rent or lease your premises, the landlord will usually insure the buildings themselves, however, you may have made improvements to the buildings that the landlord aren’t financially responsible for. These modifications are known as ‘Tenants Improvements’ and could accommodate items such as flooring, decorating, new lighting or even fixed alarm and CCTV systems. Any financial investment you have made to the premises which assists you in your day to day running of the business would fall under this extension and without additional cover, you could find yourself needing to make those initial investments all over again.
Liabilities including Public & Employers
Public Liability & Employers’ Liability offer protections to your business against claims for damage, loss or injury to members of the public (and employees), or their property as a result of any business negligence. Insurers calculate the premium based around your activities and your annual turnover and salaries, so it is imperative you let your insurers know about any unusual or high risk activities when obtaining quotes. Higher risk activities could include things such as working with heat, spray painting or working with HGVs or PCVs.
If you do employ any additional staff you must have Employers’ Liability insurance as it is a legal requirement.
Stock of vehicles
As either a motor dealer or repairer, there is a high probability that you will have vehicles in your possession regularly. These could be vehicles that you, or your business, own for retail purposes, or customers vehicles left in your possession for repairs. If an incident occurs at your unit where a vehicle is lost or damaged, you could be held responsible by the owners. A suitable stock of vehicles limit offers protection for loss, damage or theft to vehicles left at your business premises. Insurers would generally ask where you anticipate keeping vehicles (inside the unit, in a compound or purely in the open) and your security arrangements for not only the vehicles, but also the keys. Most policies would carry a requirement that keys are kept off the premises overnight, or in a safe, or suitably strong secured lock box.
General stock stored at the premises
As a business, you could be involved in the sale of parts, or equipment from your premises, or as a repairer, you may keep a degree of parts readily available for use. These items can be accommodated within your motor trade combined policy, to offer protection in the event of loss or damage. Always remember to tell your insurer about any theft attractive, or high value items you keep in stock, such as motorcycle helmets, leathers or Audio/ Visual equipment.
Money kept on site
Most garages carry a degree of cash at the premises, this could range from a small amount of petty cash, up to a significant payment for a car sale. Money cover is a thankful extension should you regularly hold cash at the premises. It’s worth discussing your requirements, and looking at the conditions in your policy with regards to security and transportation. Insurers may require a ‘cash rated’ safe equivalent to your level of cover if you intend to leave large amounts at the premises overnight, or that deposits taken to the bank are shared between more than one person. You can even extend cover for whilst your money is in a bank night safe.
Hand tools are the lifeblood of most car repair garages, and are usually collected over the entire course of your career, so a loss is not only financially disastrous, but can drastically affect your ability to work. Insuring your tools for a sum as accurately as possible helps protect your business and investment. It’s worth mentioning any specific security arrangements you have for your tools, such as locking and securing your rollcab to the fabric of the building, or if you keep your diagnostics in a safe at night. In the event of a claim to your tools, you would be required to confirm ownership, so it may be a good idea to keep an inventory, perhaps logged with your accountant, kept at home, or online, and photograph your tools.
Machinery, Plant & all other contents
Many garages will use fixed machinery within the unit, such as ramps and compressors, which due to their fixed nature, are naturally less theft attractive than hand tools or diagnostics. In view of this, Insurers charge a lower rate for you to insure this type of equipment. On this basis, it’s always worth specifying to a broker your requirements for fixed plant and machinery separately to your other contents and hand tools. Insurers can also extend your policy to accommodate annual inspection of your fixed plant and machinery to ensure it meets all the required legal and health & safety requirements.
Should you be unfortunate enough to suffer a loss at your business premises, it could mean you are unable to trade whilst the claim is being dealt with. These losses can be insured against by an adequate level of Business Interruption cover, which would pay towards the cost of alternative accommodation or expenses incurred on an ‘increased cost of working’ basis, or a loss of gross profit basis, should an alternative premises not be a suitable solution. You may have also lost invoices in a fire, which you can no longer collect, if no back-ups are available. A large claim would also mean that your regular client base could go to a competitor and seek alternative requirements for their servicing or sales needs, so business interruption cover does not necessarily stop when the claim is settled and you are back trading again. It may take many months, or even years for you to reach the levels of turnover you enjoyed before the claim happened. Most Insurers offer cover on a 12, 18 or 24 month basis, and it’s worth considering how long the effects of a claim could last when purchasing Trade Car insurance.
When arranging a Combined Motor Trade insurance policy you will need to fully declare the security at your premises, and the higher the level of cover, the higher the level of security that could be required. Insurers look for the following protections to help obtain rates and reduce your premiums. High boundary walls, palisade or metal fencing, security gates or doors, metal roller shutters and bars or grilles on your windows. In addition, CCTV with a hidden hard drive, or better still, cloud storage and remote access, along with a good quality, annually maintained alarm system will also help. Discounts can also be available if your alarm has central station monitoring.
If you want to discuss your business’s insurance needs or want to find out if you could save money with Think on your combined Motor Trade insurance, then please call our specialist team on 0800 221 8077 or click ‘Get a quote’ below.
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